Category: Fundraising Research

Philanthropy in the Gulf – Reporting from Takaful 2015

Posted on by Chris

I am at Takaful 2015 in Abu Dhabi, the conference on philanthropy organised annually by the Gerhart Center, American University of Cairo. It is a fascinating insight into how philanthropy functions in societies in transition – a single frame in a long movie whose end we cannot see.

The big theme on day one of the conference was youth. Defined here as anyone under 35, youth were the focus of the keynote speech by Sheika Al Zain Al Sabah, the head of the Ministry of Youth Affairs in Kuwait. She described how the ministry is working as a lightning conductor for the views of young people in the country. It was the educated younger people of these societies in transition who led the demonstrations and protests of the Arab Spring, and Kuwait has responded by creating a Government department, led by a young member of the Royal Family, to channel their views into policy. Young people were also the focus of a presentation by Lina Hourani, Director of CSR at Al Ahly Group (http://www.csralahligroup.com/), who run 10 day training courses for young social entrepreneurs – next year they run the course at the University of Bristol.

Venture philanthropy is present in the region, and Khulood El Nawas, Chief Officer for Sustainability, Emirates Foundation (http://www.emiratesfoundation.ae/EF/en/about-us/vision-mission) described their four-stage Incubate – Pilot – Scale – Spinoff model for developing programmes. The big gap for them and other speakers was the lack of data – baseline data on young people was absent or unreliable, so measuring impact was difficult or impossible.

The traditional forms of giving are evolving rapidly in these societies, and Omar Bortolazzi of the University of Bologna (https://www.unibo.it/sitoweb/omar.bortolazzi2/cv-en) described the ways in which awqaf (endowed foundations) are changing in Muslim countries in South East Asia, where donors can give through the internet to “e-waqf” set up for a variety of charitable purposes. Dr Youcef Benyza from the University of Batna, Algeria (http://www.univ-batna.dz/index.php/en/) tackled the governance of Zakat funds. Zakat (https://en.wikipedia.org/wiki/ZakaT), the third pillar of Islam, is a form of religious giving based on income and assets such as savings that are not being circulated. In Algeria each mosque collects zakat and passes the money up to a regional zakat office, who report to a government sponsored zakat agency. The process lacks transparency (there is no auditing, and no public reporting) and as a consequence there are regular newspaper reports of corruption in the system. But there is also strong resistance to reform because the funds are regarded as sacred and thus outwith the realm of government or auditors.

I ran a workshop on building partnerships with philanthropic foundations, where we talked about some of the barriers in the region to partnering with outside agencies. In some parts of the region there is suspicion of external funding partners (from Europe or the USA) and there is also a strong sense that regional nonprofits should be raising funds in their own countries, not depending on outsiders. There are legal constraints too – sometimes not clearly defined – that make it hard for organisations here to accept financial support from external partners. But there is a real interest in sharing expertise and knowledge, so we focused on building partnerships at the technician (specialist, expert) level; nonprofits here have developed clever ways of dealing with social problems, and I am looking forward to hearing today (Thursday) about the Wataneya Society for the Development of Orphans (https://www.linkedin.com/company/wataneya-society), who developed a quality standards scheme as a way of improving the conditions for the thousands of children in Egyptian orphanages.

Safe Harbour in a Storm

Posted on by Chris

On Wednesday it was headline news in Luxembourg where I was working with clients: the European Court of Justice had struck down the Safe Harbor agreement. Max Schrems had won a battle with Facebook and the Irish data protection authorities.

The court ruling that European Commission Decision 2000/520 is invalid means that we can no longer share data easily with US colleagues: Texting your New York colleague with your UK donor’s data of birth just became illegal.

There have always been two routes to data transfer from the EU to the USA: Safe Harbor, and the use of a model contract. The latter route is still open, according to the lawyers; there are useful posts on the ruling and its implications from Norton Rose here and from Clifford Chance here.

So how will this affect prospect research, fundraising and philanthropy?

First, it underlines the relevance of employing prospect researchers. Increasingly, prospect researchers are the custodians of personal data relating to potential and actual supporters. We act as the interface between fundraisers who want to know everything about everybody and the law which restricts what we can record and what we can share. Especially, what we can share with colleagues outside the EU.

Second, it reminds us that personal data is personal. There is an increasingly uncertain frontier between what is public and what is private as social media carries more and more of our donor’s lives. At Factary we have long had concerns about the material that people post in their Facebook pages, and have excluded it from profiles as a general policy. All of us in prospect research should continue to review and re-review our protocols to ensure that we are up-to-the-minute in data protection.

Third, it will mean some hard work over the coming weeks for organisations (universities, arts and culture, NGOs…) with sisters outside the EU (for example, your “Friends of” organisation in Washington DC) to revise or renew agreements that allow data transfer.

Fourth, it means UK suppliers such as Factary should review their data processes to ensure that all of their data is held inside the EU. At Factary we did this some time ago, and yes, all our data and servers are inside the EU.

Finally, this will be especially difficult time for fundraising and philanthropy. Increasingly philanthropists are international – a home here, a business there, and a foundation somewhere else. To work with a donor who lives in Paris but works out of New York we need to be able to share data quickly and effectively with our team. Our philanthropists (major donors, strategic donors) want us to react quickly and to provide coordinated, joined-up service. That is going to be a delicate, difficult job following this ruling.

The closure of Safe Harbor means choppy seas for all of us.

Trust Women

Posted on by Chris

Why so few women in UK foundations?

We’ve analysed all of the newly created grant-making trusts (foundations) registered in England and Wales since 2005 – a data set of 2,312 new grant-makers. Our findings are in a new Factary report, ‘Trust Women’, available for download here.

Key Findings:

  • Boards are not balanced – on average there is just one woman per board across all of these trusts.
  • Almost one third (29.7%) had all-men boards when they were registered.
  • Just one trust in five has women in the majority on boards.
  • And we found some evidence that trusts with women in the majority were poorer at start-up than those with men-majority boards.

Our report is based on Factary’s New Trust Update dataset (http://factary.com/what-we-do/new-trust-update/ ).

To find out more about this data, contact research@factary.com

Download ‘Trust Women’ here.

The £6.8 billion Recipe for Philanthropy

Posted on by Shaun

There is a kitchen theme in this year’s Foundations of Wealth, published today, with Gordon Ramsay featured alongside the owner of the UK’s largest franchise for Domino’s Pizzas, and a kitchenware manufacturer.

They are three amongst 42 wealthy philanthropists who have set up a grant-making trust during 2014, all of them profiled in depth in our freshly-prepared report.

New trusts appear to be boys’ toys. 93% of the wealthy founders whom we profile are men, with just 7% women. That is the same ratio as in 2013, and slightly more male than in 2012. It reflects the gender imbalance in great wealth in the UK with around 10% of the Sunday Times Rich List being women, and a hard-to-explain gender imbalance in structured philanthropy. As “Untapped Potential” reported in 2011, just 4.8% of European foundation grant monies go to women and girls (see Shah, Seema, Lawrence T McGill, and Karen Weisblatt. Untapped Potential: European Foundation Funding for Women and Girls. New York: Foundation Center, 2011.) Factary is currently engaged in a study of philanthropy amongst women of wealth to try to find out why.

As in previous reports, the founders of UK grant-making trusts are economically active – more than two thirds (69%) are under 65 – a similar percentage to 2013 and a slightly younger profile than 2012, when 53% were under 65.

Their’s is new money – more than three quarters are self-made millionaires – with wealth principally from financial services, retail, manufacture and property. The total wealth represented by the 42 we have profiled in depth is over £6.8 billion – reflecting the increasing concentration of wealth in the UK.

The founders are distinctly international, with four people of Indian descent and three others with non-UK nationality, as well as founders who have lived and worked abroad. The UK is not the easiest country in the world in which to create a charitable foundation (it is arguably easier in the Netherlands, for example) but the combination of a wealth management industry that is growing and gearing up for philanthropy, a broadly stable economic climate and people – philanthropists – who want to make their giving more effective has led to a boom in the establishment of trusts. Last year we reported on 214 newly created grant-making trusts in our monthly New Trust Update report.

Could you build a partnership with these new trusts and foundations? Our report tells you about the founding philanthropists, about their philanthropy they set up their foundation, and about the new foundation’s interests. Health, welfare, education and training are the big subjects, and we’ve identified clusters of interests linking health and arts, education and welfare. We have researched an in-depth profile of each of these leading philanthropists, and here you will find biographic information that will help you build a link with the trust, or the founder.

Philanthropy is alive and well in the UK amongst people of wealth. These good 42 at least are willing to share their wealth with the rest of society.

New Frontiers of Philanthropy: A Review

Posted on by Chris

New Frontiers of Philanthropy (Oxford University Press, 2014) is the Haynes manual for new philanthropists. With this book we can open up the engine of new philanthropy and check out the workings. With 653 pages plus an extensive bibliography it is a substantial volume covering the people and organisations involved in new forms of philanthropy, the tools that they are using, and key issues.

New Frontiers of Phil cover

Whether you are a fundraiser working with philanthropists or foundations, a researcher trying to understand philanthropy, the manager of a family foundation or a financial adviser you will find lots to interest you here.

The book has three main sections:

“New Actors” deals with new organisations in the philanthropy and social area. These new actors may be assembling capital, providing secondary markets or exchanges, or prospecting for new ventures, and Professor Lester Salamon makes clear in his introduction that many fundraisers are not considering our do not understand some of the key actors in finance, such as pension funds.

The section includes some terminology from the finance sector that we are going to have to get used to applying in the non-profit sector: “capital aggregators” for example are essentially fundraising organisations such as community foundations.

The increasing involvement of business in charitable activities is highlighted – and Rick Cohen contributes a chapter on corporate-originated charitable funds, such as the Fidelity Charitable Gift Fund with US$3.8bn in assets under management. These funds are growing faster, operating more efficiently, and selling more aggressively than their purely charitable counterparts, trends highlighted by Prof. Salamon who notes that commercial donor-directed funds are now larger than community foundations in the USA.

Because the book’s scope is so wide it includes entities that are on the margins between charity and business, or “impact-first” and “finance-first”. It includes a deal of material on businesses that are focusing on the “base of the pyramid” (the poor). For Prof. Salamon these are businesses that are meeting a social need; for me these are simply businesses dealing with a different market segment.

“New Tools” is an encyclopaedic description of the many different ways in which someone who wants to do social or environmental good might go about it. It covers loans, social impact bonds, socially responsible investment, new forms of grant making including prizes, crowdfunding… and more. Fundraisers and financial advisers should take the time to read this section because it will inspire both to try new products with their philanthropic customers.

The third section in the book, “Cross-Cutting Issues”, debates the issues that emerge from the new philanthropy including “the elusive quest for impact”. Dr Alex Nicholls and Rodney Schwartz send out a wake-up call to the fundraising community, with a chapter on the demand side of the social investment marketplace, saying that the challenge is “..not an insufficient supply of social investment capital but an insufficient supply of investment-ready deals.” (In plain fundraising speak: ‘there are lots of donors, but not enough well-prepared proposals’.)

In this section there is a thoughtful piece by Dr Maximilian Martin giving the global perspective on new philanthropy. Dr Martin challenges the conventional view, arguing that social capital markets are inefficiently relationship-driven, not value-driven. He is subtly signalling the limits of relationship fundraising, noting that “…nonprofit leaders typically spend vast amounts of time on fundraising rather than on the continuous improvement of the work of the organizations they lead.” [p.608] He creates the phrase “synthesized social businesses” to suggest that we should move from a world of small fragmented organisations to one in which we build larger business ventures with a social purpose. “A philanthropic foundation could acquire [control over] …a company with the mission to make the good or service available to as many people as possible around the world.”

If you want to understand what is happening out at philanthropy’s cutting edge, this is the book for you. No-one in the book is claiming that all our donors are going to be asking us about making a quasi equity investment in our social enterprise next week. But the evidence from the impact of the venture philanthropy movement in Europe is that these ideas are already circulating in a donor community that is looking for change.

Be prepared for the new philanthropy; read this book.

Factary and the new philanthropy
Factary has monitored and researched the new philanthropy for many years. We were the first research group to publish a report on venture philanthropy in the UK and we continue to monitor new developments. Contact Nicola Williams, nicolaw@factary.com or Chris Carnie, chris@factary.com if you would like to know more about our services in this area.

The Prospect of Power

Posted on by Chris

The Researchers in Fundraising conference this week in London feels like a milestone in our profession – the arrival of a real community of professionals.

There were signals everywhere that we are a real profession. We, the community, have our networks – I saw lots of ‘Hello again! How are you?’s. We have an emerging group of personalities – Martin Mina (Action on Hearing Loss) is the personification of the funny-but-with-a-message presenter. We have our academics – Dr Beth Breeze (University of Kent) continues to uncover the emotional underwiring that supports philanthropy and fundraising. We have international appeal, with Helen Brown (Helen Brown Group) and Gerry Lawless (iWave) flying all the way across the Atlantic to join us.

We have suppliers anxious to win our business and therefore competing (this is normal and healthy) to innovate for our sector. We have media – social media – as conference attendees Tweeted #RIFConf2014 to the world. We even have the beginnings of politics, the politics of women and women’s rights in a workplace where too many bosses (mea culpa) are still men, celebrated by Beth Breeze in her sense of enjoyment at a conference audience that was mainly female.

And we have the intellectual and ethical challenges that define a real profession, personified in Karl Newton of LSE with his intimate description of the Gaddafi incident.

So what’s missing? At the conference the missing ingredient, reported again and again by researchers, was power. They didn’t use that word. What they said was ‘I just can’t get my boss to take research seriously’, or ‘I couldn’t get the budget’, or ‘My boss wrote our policy and I can’t get him to change it.’

Power, and the lack of it, is not a new topic at RiF. But now that we have a real, fully-fledged profession the lack of it is becoming more painful. We need the power to influence our fundraising colleagues. We need the power to write strategy, manage people and influence policy in the fundraising community. We need the power to set budgets, hire and fire. We need the power to commission research, development and innovation in our field. With the Sword of Damocles of new EU data protection legislation hanging over us, we need the power to influence legislation.

We need power, and we need it now.

We know how power works. We research it all the time. It is linked to circles of influence, to people with a strong voice, to a community united behind one or two clear ideas simply expressed.

We don’t have to call it that. We can call it “voice” , or “influence” or “a seat at the high table.” We can be subtle about winning power or we can be loud and proud. We can fight or argue, persuade or hint.

We need friends high up in the non-profit trees. The Chief executive of a brand-name national charity who ‘gets’ research. The MPs and MEPs who used to work in nonprofits, who befriend research. Senior staff at the Institute of Fundraising. We need to find these people (ha! easy for us prospect researchers!) We need to cultivate them and we need to persuade them with one or two clear simple messages. And then, like good fundraisers, we need to steward them.

We can use the power of research. We can do this.

Middle Donors – New Data

Posted on by Chris

“Middle donors” is an area of growing interest for many non-profits.

Fundraisers refer to middle donor programmes as an easy step up from a regular donors programme. Middle donor programmes fit with the donor pyramid model, suggesting that donors will upgrade from regular giving into the middle donor space and that some will go on to become major donors.

Despite the interest there is remarkably little data on this. We know little about who is giving, what they are supporting, and how much is being raised.

To add a little new data to the debate we’ve done an analysis in Factary Phi.

Download our report – “Where is the Middle?” – here.

The Newest Philanthropists

Posted on by Chris

Thirty of the UK’s newest philanthropists are featured in a report published today by Factary.

The report is focused on the Ultra High Net Worth Individuals (UHNWIs) and High Net Worth Individuals (HNWIs) who have founded grant-making trusts and foundations during 2013.

We profile 30 of the richest people in the country who have created grant-making bodies, and analyse their wealth, philanthropic interests and biographical information to create a picture of the UK newest philanthropists. With a combined estimated wealth of £5.7 billion, these individuals represent a significant source of funding for UK non-profit organisations in the years to come.

The report includes:

  • Detailed profiles of thirty new philanthropists
  • Updated information on their trusts and foundations
  • Note that, with one exception, none of these trusts is listed in any other directory of grant-making trusts
  • Our analysis of the biographic, philanthropic and financial data on these philanthropists
  • Networking Index to identify the links between philanthropists, companies and the new trusts.

HOW TO ORDER
To order the report email Nicola Williams, nicolaw@factary.com

The report is priced at £135. New or existing subscribers to Factary Phi or Factary’s New Trust Update get a discounted price of £95.

From Bookmaking to Billionaires
Included in the report is a scion of a billionaire family, a Duchess, a Viscount and two Knights of the Realm. There are eight representatives from the financial services industry including two hedge fund managers and four investment bankers, along with philanthropists with other sources of wealth including landownership, art galleries, bookmaking and football.

London, and International
There is a strong geographic concentration on London and the Home Counties but also a continuing international flavour to the new philanthropists in the UK with seven of the thirty UHNWIs and HNWIs having nationalities other than British, and global connections identified to a wide range of countries including Zambia, South Africa, Italy, Nigeria and St Vincent and the Grenadines.

Oxbridge
There is a strong Oxbridge connection – a third of these new philanthropists went to either Oxford or Cambridge, with over 25% going to Oxford. Other UK universities attended include the University of Bristol, the London School of Economics, Leeds University and the University of Birmingham. Three of the people featured also went to the same public school; Charterhouse.

UK Philanthropy, Goes on Growing
During 2013 Factary’s New Trust Update reported on a total of 217 newly-registered grant-making trusts and foundations in the UK. This report shows that people of significant wealth are continuing to create foundations and grant-making trusts to support philanthropic organisations in the UK and abroad, creating a positive picture of philanthropy in the UK.

Venture Philanthropy in the UK Shows Similar Characteristics
The findings in this new report reflect the new philanthropists that we identified in our 2013 report on The Venture Philanthropists. In that report we found that 39% of UK venture philanthropists come from the financial services industry. We also found many people of wealth – £38 billion in combined personal assets.

Research:
This report was researched and edited by Will Whitefield, Senior Researcher at Factary. It is published as a special supplement to Factary’s New Trust Update.

How the Elite Connect

Posted on by Chris

A new report by Factary shows how the elite connect in Britain.

We’ve looked at how people link up – how they know each other – because it’s so central to fundraising. We used data from Factary Atom, our connections research and mapping service.

We show why it is important to research business AND charity connections and highlight the role of the London Clubs (we name the most connected). We include statistics that show the relative connectedness of alumni from UK and US universities, and discuss the relevance of hobbies and interests in making connections.

The report, “My Friends… How the Elite Connect in Britain”, is available free for download here: How the Elite Connect

The New Trustees, and a wealth of philanthropy

Posted on by Chris

More than 6,200 people have become trustees of new grant-making trusts in the UK since 2005. Who are these people?

We have researched our New Trust Update database to answer this question, and we have some interesting findings about these New Trustees:

  • The New Trustees are wealthy: we have identified more than £31 billion in combined wealth amongst New Trustees
  • The New Trustees are international: 119 New Trustees live abroad
  • London and Salford, Manchester are the centres for new philanthropy; our New Philanthropy Index shows high concentrations in these areas

Our latest report – The New Trustees – includes these findings and more, and gives detailed data on these new philanthropists.

Download the report, free, here: The New Trustees